How to Wisely Use Your Stimulus Money

Okay, people, I think most of us have received our stimulus money as a result of the CARES Act. Its delivery method depends upon your data from your most recent tax returns or Social Security. If you’ve received refunds or SS money via direct deposit, you’ll get it that way (quicker) or if you’ve opted for snail mail, you’ll get it that way (slower). I’m in the former group and got mine last week.

Warning, I recently watched Rocky IV so there are a lot of Rocky GIFs/analogies splattered throughout the post. 😉

That being said, I wanted to write a post with my two cents on how to use our stimulus money wisely. This post is based solely on my opinion; however, I have seen and heard many others talking about this recently so, no doubt, these things play an influence.

Although, I’ve purposely not read anything on it so I could really think and pray about it without much outside influence.

I’m separating my advice into two camps:

Those who need the stimulus money

Those who don’t need the stimulus money

Before I dig in, let’s define stimulus –

A thing that rouses activity or energy in someone or something; a spur or incentive

Let’s face we’ve all been hit hard by the COVID-19 pandemic in one way or another!! Me, I downright need some hugs!!

Some day we’ll be able to do this again!!

This stimulus $ is meant to do one of two things – stimulate the economy (which has taken a bad beating) and aid individuals and families who’ve also taken a beating.

The stimulus money, for those of us who are not hurt financially, is meant to incentivize us to spend some $$$ and get that big ‘ole economy going again! And for those who are hit financially, it’s meant to help you survive.

No matter which way you look at it, many folks and the economy as a whole have been beaten up badly

How to Use Your Stimulus Money Wisely if You Need the Money

If you find yourself in this camp this section is for you. If you are not sure which camp you are in, you most likely are in the second camp, but not necessarily! Why is that? Let me explain…

I think we’ve all recently seen how a global emergency is scary. Even if we haven’t lost our job, we’ve now thought about it. That being said, even if you are not laid off and any one of these does apply to you:

Have no emergency fund

Have consumer debt other than a mortgage

Live paycheck to paycheck

I think you are in this camp.

#1 Food and Shelter

First things first, we need to eat and live so if you are lacking in either of these two areas, you need to use your stimulus money for this. However, I will add that there a lot of food pantries at churches all over the world so please reach out to your local church if this is a big struggle. People want to help you. ♥

Additionally, if you have a mortgage and are struggling to pay it, most lenders are allowing for the deferment of payments temporarily. Look online for your lender’s specifications as all are different. Additionally, if you can log into your lender’s online portal I highly recommend this because phone lines are jammed with people calling into lenders.

If you pay rent somewhere and are struggling to keep up with it in light of the pandemic, reach out to your landlord. They may be making special provisions for a deferral of payment temporarily.

#2 Emergency Fund

Once you have food & shelter taken care of, focus on your emergency fund. If you don’t have an emergency fund, news flash – YOU NEED ONE!!!

Anything is better than nothing but ideally, I and many other financial savvy folks recommend 3-6 months of expenses saved up. How do you calculate that? Firstly, you need to be on a budget. Then you take your monthly budget and cut out everything but the essential stuff. This will give you your monthly emergency amount. However many multiples of this you have equals how many months your emergency fund can sustain you if you have no income coming in.

#3 Consumer Debt

Once you’ve got food, shelter and an emergency fund in place, you should tackle any consumer debt. High-interest credit card debt needs to get paid off and stay paid off to be able to get ahead financially. I do use credit cards responsibly and by responsibly I mean, I charge no more than I can afford to pay off in full and on time each and every month.

If you are good with #1, #2 and #3a, you can use your stimulus to tackle any car debt. However, if you need to take care of #1 or #2 and/or #3a but still cannot pay your car payment, know that most auto lenders are allowing for a temporary deferral of payments right now. Again check your lender’s website of your personal login to your auto loan for specifics.

Trust me on this, once you’ve got 1, 2 and 3 down, you’ll be able to sprint towards wealth building.

Once you do these things, you’ll be far ahead of the pack!

How to Use Your Stimulus Money Wisely if You Don’t Need the Money

Okay, for anyone in this camp, consider yourself very blessed and probably privileged.

If you recognize that you’ve got the above bases covered (food/shelter, emergency fund and consumer debt paid off), and are pondering what to do with the money, this section is for you. We, in this camp, need to think about how to use our stimulus money to stimulate the downtrodden economy.

There are multiple ways to do this and I will additionally share how I am using my stimulus money.

Support Local Businesses

I think this is the best way to spur the economy back and it all starts locally!

Here are some ways in which to do this:

Buy take out from your fav local joint and tip generously!

Call your local favorite boutiques and arrange a purchase/pickup of some of your favorite supplies. Even if they are closed, I recommend reaching out via email and/or phone. I’m sure they’d love to sell you something safely.

Order online from some of your favorite local stores. Many businesses have upped their online presence when they had to shut down.

Buy gift cards from your favorite local restaurants & stores. Maybe you don’t want to get takeout currently and that is fine but you can always buy a gift card!

Buy a CSA (Consumer Supported Agriculture) share for the summer. This is where you buy a subscription to crops from a local farm or garden. Typically, you go pick it up once a week and enjoy the fruits of their labors

Build a Victory Garden

Victory Gardens were a thing back during WWII. According to Bob Finnan of the Medina County Gazette they were introduced as a way for families to say at home and support national efforts by growing produce.

This is also a way to support a local garden store in your area by purchasing supplies, seeds and plants from them.

Donate

Okay, so this can be done in multiple ways. Sure you can donate to your favorite charity but how about donating locally right now? Perhaps a homeless shelter? Or a Food pantry? Or your neighbor who needs groceries? Or maybe a small business owner who is down on their luck right now?

How it feels to support local businesses

What am I doing?

I want to make a disclaimer that while I have placed myself into this camp, I recently bought a new/used car and financed part of it. I had money saved for a car purchase and thought I wouldn’t need it for a year or two until my old car died.

Then I moved to a new apartment in February and was able to pay for 6 months of rent upfront for a discount. Good idea, right?! Well, I used part of my car money to do this and then I was hit in a car accident and my former car was totaled. #MurphysLaw

This is also a great example of why we need emergency funds, car funds, etc.

Anyway, I decided not to use my emergency fund and financed part of my car knowing I could pay it off while I had no monthly rent payment for 6 months. Well, I’m glad I still have my emergency fund! Moreover, my car will be paid off in the next several months. This is why I’m using my stimulus money to stimulate the economy and support local businesses.

Firstly, I’m donating a big chunk of it to a friend who owns a restaurant.

Secondly, I’m building a victory garden. I did buy the raised bed from a large supplier but I’ll buy the rest of my supplies from local gardens.

Thirdly, I’m using the rest to buy take out food, tip generously, purchase gift cards and stock up on soaps from my favorite local boutique.

Closing Thoughts

I really have one final thing to say…

Seriously, let’s all come out as winners even if it means a black eye or two! If you need the stimulus money, use it wisely. If you don’t need the stimulus money, use it wisely.

Either way, money management comes down to making a plan and following the steps to make that plan happen.

Hi Cindy! Thanks for the comment and I appreciate the Dave Ramsey reference. I do value him! There was a time when I followed his teachings to a t. Now I’ve created somewhat of my own path influenced by several great teachers; however, one can never go wrong following the baby steps.

Excellent post! Very impressive on how you were able to connect Rocky to spending stimulus money. I agree with you, if you fall into camp 2, now is the time to spend! Local businesses need our support to help bring this economy back to life. Also, great point about ordering online from your favorite stores. Several local businesses have expanded their online capabilities so that we can easily order from them.

As a side note, I am a fan of the Rocky series! The first film is my favorite but Rocky IV has an amazing training montage. I still listen to “Hearts on Fire” 🙂

Hi Alexis! Thank you kindly. You know it was just lucky timing that I had watched Rocky IV and then as I was writing this post, I was able to tie it in. I was able to watch Rocky IV with my niece & nephew the other weekend and they loved it so now we want to go back and watch the others.

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[…] this interview, I bought a new to me used car and financed part of it – you can read about it here. However, it will be paid off in the next several months so I am only financing it for a total of […]

[…] Note: Deanna at Recovering Women Wealth has an excellent blog post about using your stimulus money. She mentions that planting a garden is also a good way to support local businesses who are in need […]

About Me

My name is Deanna and I am happy to be on this redemptive path. I got sober from drug addiction/alcoholism in 2010 and returned to a faith in Christ. Additionally, I finished digging my way out of debt in 2017. Today, I’m learning to be a wise steward/investor of my resources while helping other women find their victories too. More about me.